Trustnet Magazine 57 December 2019 | Page 36

In focus [ PENSION ] 36 / 37 Manager Bruce Stout says investors should turn away from the UK and towards the developing world if they want a reliable and growing income TRUSTNET Murray International has made 483.66 per cent since Stout took charge in June 2004, compared with 366 per cent from the FTSE World ex UK index and 330.86 per cent from its IT Global Equity Income sector. The trust is on a premium of 3.85 per cent compared with 1.17 and 1.10 from its one- and three-year averages. FACT BOX MANAGER: Bruce Stout / LAUNCHED: 18/12/1907 / DISCOUNT/PREMIUM: +3.85% / OCF: 0.61% CROWN RATING PERFORMANCE OF TRUST VS SECTOR AND INDEX Murray International Trust FTSE World ex UK IT Global Equity (483.66%) (366.00%) Income (330.86%) 500% 400% 300% 200% 100% 0% Ju -100% would you do that? I can’t get my mind around it. “Why would I pay 40 basis points a year to own Nestlé’s 10-year bond? I don’t get any income. I don’t even get a KitKat. So why would I do it?” The manager accepted the shift in economic power from west to east does not mean there are no investment opportunities in the developed world. For example, he said companies such as BHP Billiton, Atlas Copco and Intel have the business models and market share to weather any economic shocks and steadily increase dividends. “But the deeper pool of opportunities can be found in Asia and emerging markets,” he continued. “Emerging market debt offers more attractive yields versus gilts, eurobonds and US treasuries, and policy makers have far more tools in the box to fuel growth. Companies generally have stronger balance M urray International has undergone many changes since its launch in 1907; however manager Bruce Stout said one of the biggest transformations has taken place over the past 20 years. Before the turn of the millennium, the only place that investors could get a reliable and growing income was in the UK. However, Stout has now cut the trust’s exposure to its home market to its lowest ever levels, while lifting its exposure to emerging markets to its highest ever levels. The manager said this is because the developing world is now the only place to find “economic orthodoxy”. “In this unorthodox world – and by that I mean in the UK, the US and Europe, where every yield curve has been flattened to zero or where some of them are negative – you’re actually paying a company for the privilege of owning a bond,” he explained. “Why sheets and are benefiting from being active in countries that are growing much faster than those in the west. “Murray International’s strategic emphasis towards Asia Pacific and emerging markets may not prove its full worth over the next 12 months, but over the next five, 10 or 20 years, these regions will shine and catch the eye.” Murray International Source: FE Analytics trustnet.com